Jennifer Stewart v. Michael Astrue ( 2009 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 08-1739
JENNIFER S TEWART,
Plaintiff-Appellant,
v.
M ICHAEL J. A STRUE,
Commissioner of Social Security,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of Illinois.
No. 2:06-cv-02074-DGB—David G. Bernthal, Magistrate Judge.
A RGUED M ARCH 3, 2009—D ECIDED A PRIL 2, 2009
Before B AUER, K ANNE, and W OOD , Circuit Judges.
P ER C URIAM. A magistrate judge, presiding by consent,
overturned the denial of Social Security disability
benefits to Jennifer Stewart and remanded her case to the
agency, but then denied her application for attorney’s
fees. The magistrate judge concluded that the Commis-
sioner of Social Security was substantially justified in
opposing Stewart’s suit to overturn the denial of benefits,
and thus Stewart was not entitled to an award of attor-
2 No. 08-1739
ney’s fees. We reverse that determination and remand for
entry of an award of fees.
I. BACKGROUND
In February 2003, Stewart applied for Disability Insur-
ance Benefits and Supplemental Security Income,
claiming that she was disabled by bipolar disorder,
obsessive-compulsive disorder, and fibromyalgia. After her
application was denied administratively, Stewart re-
quested a hearing before an administrative law judge. The
ALJ applied the five-step analysis, see 20 C.F.R.
§ 416.920(a)-(g), and concluded that Stewart was not
disabled. The ALJ first concluded that, although Stewart
had previously worked as a data-entry clerk, waitress,
restaurant manager, payroll clerk, and babysitter, she
had not engaged in substantial gainful employment
since the alleged onset of her disability. The ALJ next
found that Stewart’s bipolar disorder, obsessive-compul-
sive disorder, and fibromyalgia all constituted severe
impairments, but that these impairments, individually
or collectively, did not meet or equal a listing that
would automatically render Stewart disabled. The ALJ
chose not to credit Stewart’s testimony about her alleged
pain and functional limitations because, according to
the ALJ, the medical record did not corroborate that
testimony. The ALJ also found that the opinions of Stew-
art’s treating physician and treating psychiatrist, who
both thought that she was not capable of work-related
activities, were inconsistent with other evidence and were
not controlling. According to the ALJ, Stewart retained
the residual functional capacity to perform work in-
No. 08-1739 3
volving simple, routine tasks so long as she was not
required to lift more than twenty pounds at a time or
carry objects weighing over ten pounds or constantly
interact with co-workers. These limitations, the ALJ
concluded, prevented Stewart from performing her past
relevant work but not other jobs in the national economy,
including those of laundry worker, sorter, and punch-
board assembler. The ALJ denied Stewart’s claim in
November 2005, and the Appeals Council affirmed the
decision.
Stewart sought review in the district court. She argued
that the ALJ erred in rejecting the opinions of her
treating physician and treating psychiatrist. She also
maintained that the ALJ did not adequately establish
that she could perform other work in the national econ-
omy. Finally, Stewart contended that the Appeals
Council erred in failing to give adequate weight to
new evidence submitted after the ALJ’s decision.
The magistrate judge concluded that the new evidence
was immaterial, since it applied to the time period after
the ALJ had denied Stewart’s application for benefits.
In addition, the judge concluded that the ALJ had ade-
quately explained his reasons for declining to give con-
trolling weight to the two treating physicians’ opinions.
The magistrate judge agreed with Stewart, however, that
the ALJ lacked a sufficient basis to conclude that she
could find other work in the national economy. The
judge noted that the ALJ had failed to include all of Stew-
art’s limitations when he posed a hypothetical question
to a vocational expert. The hypothetical did not mention
Stewart’s moderate difficulties in maintaining concentra-
4 No. 08-1739
tion, persistence, and pace. Furthermore, the magistrate
explained, the ALJ had purportedly relied on “new and
material evidence” to conclude that Stewart’s residual
functional capacity was even more favorable than the
state agency’s doctors believed, and yet in his decision
the ALJ never identified what evidence supported the
change. Lastly, the magistrate judge declined to rule on
Stewart’s assertion that the vocational expert’s testimony
was not consistent with the Dictionary of Occupational
Titles, since additional testimony on remand would
make the issue irrelevant. The magistrate judge there-
fore granted Stewart’s motion for summary judgment
and remanded the case to the ALJ for further proceedings.
Stewart then filed a petition for attorney’s fees under
the Equal Access to Justice Act (EAJA), which directs a
court to award fees to a prevailing party in a suit against
the United States unless the government’s position was
substantially justified or special circumstances make the
award unjust. See 28 U.S.C. § 2412(d)(1)(A); Sosebee v.
Astrue, 494 F.3d 583, 586-87 (7th Cir. 2007); Muhur v.
Ashcroft, 382 F.3d 653, 654 (7th Cir. 2004). The magistrate
judge denied the petition; the pertinent part of the
court’s opinion reads in full:
The Court has carefully reviewed the record, including
its own Order. While the Court did order remand, it
did not make any finding in the Order that the posi-
tion of the United States was not substantially justi-
fied. In fact, a review of that Order confirms Defen-
dant’s assertion that the Court rejected several of the
Plaintiff’s claims of error. Even as to the point argued
successfully by Plaintiff, the Court did not and does
No. 08-1739 5
not now feel that the position taken by the Defendant
Commission of Social Security was not substantially
justified, especially when the entirety of Defendant’s
position is considered. Accordingly, despite the reason-
ableness of the fees and the fact that Plaintiff was the
prevailing party, Plaintiff is not entitled to fees and
expenses under the Act.
II. DISCUSSION
The EAJA provides that a district court may award
attorney’s fees where (1) the claimant was a “prevailing
party,” (2) the government’s position was not “substan-
tially justified,” (3) no special circumstances make an
award unjust, and (4) the claimant filed a timely and
complete application with the district court. 28 U.S.C.
§ 2412(d)(1)(A); Tchemkou v. Mukasey, 517 F.3d 506, 509
(7th Cir. 2008); Krecioch v. United States, 316 F.3d 684, 687
(7th Cir. 2003). The Commissioner disputes only that the
second prong is satisfied. A position taken by the Com-
missioner is substantially justified if it has a reasonable
basis in fact and law, and if there is a reasonable con-
nection between the facts and the legal theory. See Pierce
v. Underwood, 487 U.S. 552, 565 (1988); Conrad v. Barnhart,
434 F.3d 987, 990 (7th Cir. 2006). The Commissioner
bears the burden of proving that both his pre-litigation
conduct, including the ALJ’s decision itself, and his
litigation position were substantially justified. See Conrad,
434 F.3d at 990; Golembiewski v. Barnhart, 382 F.3d 721, 724
(7th Cir. 2004). We review a district court’s denial of fees
under the EAJA for abuse of discretion. Underwood, 487
6 No. 08-1739
U.S. at 562; Cunningham v. Barnhart, 440 F.3d 862, 864
(7th Cir. 2006).
In arguing that the magistrate judge abused his discre-
tion, Stewart first contends that the magistrate judge
denied an award of fees based in part on the fact that
she did not prevail on every challenge she made to the
ALJ’s decision. She argues that the judge unfairly penal-
ized her for raising multiple arguments and cites Hensley
v. Eckerhart, 461 U.S. 424, 435 (1983), for the proposition
that she is entitled to fees for efforts expended on all
arguments, even ones that did not prevail. We disagree.
It is true that EAJA fees are not determined by the
number of successful arguments, but a party’s success on
a single claim will rarely be dispositive of whether
the government’s overall position was substantially
justified. See Underwood, 487 U.S. at 569; Bricks, Inc. v. EPA,
426 F.3d 918, 922 (7th Cir. 2005); United States v. Hallmark
Constr. Co., 200 F.3d 1076, 1080 (7th Cir. 2000). EAJA
fees are appropriate when the government’s litigation
positions and overall pre-litigation conduct, including
the ALJ’s decision itself, lacked a reasonable basis in
law and fact. See Conrad, 434 F.3d at 990; Golembiewski, 382
F.3d at 724. In this case, the magistrate judge—simply
by properly assessing the government’s conduct as a
whole—did not ignore or lessen the force of its earlier
remand order and thereby engage in “argument counting.”
Regardless of the basis of the remand order, the judge was
required to look at the government’s overall conduct. In
other words, Stewart is incorrect in assuming that the
district court could consider in its substantial-justification
determination only the one successful issue discussed in
No. 08-1739 7
the remand order, and that its consideration of other
contentions constitutes “argument counting.” See Hallmark
Constr. Co., 200 F.3d at 1081.
Stewart’s second contention, however, has traction. She
argues that fees should have been awarded because the
ALJ contravened longstanding agency regulations, as
well as judicial precedent, both in determining her
residual functional capacity and in formulating the hypo-
thetical given to the vocational expert. We agree with
Stewart on each point. As to the former, an ALJ must
articulate in a rational manner the reasons for his assess-
ment of a claimant’s residual functional capacity, and in
reviewing that determination a court must confine itself
to the reasons supplied by the ALJ. Getch v. Astrue, 539
F.3d 473, 481-82 (7th Cir. 2008); Blakes ex rel. Wolfe v.
Barnhart, 331 F.3d 565, 569 (7th Cir. 2003); Steele v. Barnhart,
290 F.3d 936, 941 (7th Cir. 2002). Therefore the ALJ
himself must connect the evidence to the conclusion
through an “accurate and logical bridge.” Berger v. Astrue,
516 F.3d 539, 544 (7th Cir. 2008); Giles ex rel. Giles v. Astrue,
483 F.3d 483, 487-88 (7th Cir. 2007); Ribaudo v. Barnhart, 458
F.3d 580, 584 (7th Cir. 2006); Dixon v. Massanari, 270 F.3d
1171, 1176 (7th Cir. 2001). In this instance, although the
ALJ did discuss the evidence that was developed after
the state-agency physicians had last reviewed Stewart’s
medical records, the ALJ failed to specify what “new and
material evidence” led him to substitute his own, more
favorable assessment of Stewart’s residual functional
capacity for that of those physicians. For example, the ALJ
mentions Stewart’s ability to cook, clean, do laundry, and
vacuum at her home, but those activities do not necessarily
8 No. 08-1739
establish that a person is capable of engaging in substan-
tial physical activity. Diaz v. Prudential Ins. Co. of Am., 499
F.3d 640, 648 (7th Cir. 2007); Zurawski v. Halter, 245 F.3d
881, 887 (7th Cir. 2001); Clifford v. Apfel, 227 F.3d 863, 872
(7th Cir. 2000). The ALJ should have explained any incon-
sistencies between Stewart’s activities of daily living
and the medical evidence. Carradine v. Barnhart, 360 F.3d
751, 755 (7th Cir. 2004); Zurawski, 245 F.3d at 887. The
Commissioner asserts the ALJ’s discussion of evidence
after the physicians’ last review was reasonable, even
without specifying what evidence factored into his deter-
mination. This position is contrary to our repeated
holding that a denial of benefits cannot be sustained
where an ALJ failed to articulate the bases of his assess-
ment of a claimant’s impairment. See Brindisi v. Barnhart,
315 F.3d 783, 786-87 (7th Cir. 2003); Scott v. Barnhart, 297
F.3d 589, 595-96 (7th Cir. 2002); Steele, 290 F.3d at 940-41.
Likewise, the formulation of the hypothetical given to
the vocational expert also contradicts judicial precedent.
When an ALJ poses a hypothetical question to a voca-
tional expert, the question must include all limitations
supported by medical evidence in the record. See Bayliss
v. Barnhart, 427 F.3d 1211, 1217 (9th Cir. 2005); Young
v. Barnhart, 362 F.3d 995, 1003 (7th Cir. 2004); Indoranto
v. Barnhart, 374 F.3d 470, 474 (7th Cir. 2004); Steele, 290
F.3d at 942; see also Boyd v. Apfel, 239 F.3d 698, 707 (5th
Cir. 2001); Decker v. Chater, 86 F.3d 953, 955 (10th Cir.
1996). More specifically, the question must account for
documented limitations of “concentration, persistence
or pace.” Ramirez v. Barnhart, 372 F.3d 546, 554 (3d Cir.
2004); Young, 362 F.3d at 1004; Kasarsky v. Barnhart, 335
No. 08-1739 9
F.3d 539, 544 (7th Cir. 2003); Burns v. Barnhart, 312 F.3d 113,
123 (3d Cir. 2002); Thomas v. Barnhart, 278 F.3d 947, 956
(9th Cir. 2002); Newton v. Chater, 92 F.3d 688, 695 (8th Cir.
1996). The Commissioner asserts that the ALJ accounted
for Stewart’s limitations of concentration, persistence,
and pace by restricting the inquiry to simple, routine
tasks that do not require constant interactions with co-
workers or the general public. We have rejected the very
same contention before. In Young v. Barnhart, we held that
a hypothetical with exactly those specifications did not
adequately account for the plaintiff’s medical limitations,
including an “impairment in concentration.” 362 F.3d at
1004. The Commissioner continues to defend the ALJ’s
attempt to account for mental impairments by restricting
the hypothetical to “simple” tasks, and we and our sister
courts continue to reject the Commissioner’s position. Craft
v. Astrue, 539 F.3d 668, 677-78 (7th Cir. 2008) (limiting
hypothetical to simple, unskilled work does not account
for claimant’s difficulty with memory, concentration, or
mood swings); Ramirez, 372 F.3d at 554 (hypothetical
restriction to simple one or two-step tasks does not
account for limitations of concentration); Kasarsky, 335
F.3d at 544 (constructing hypothetical question about a
person with borderline intelligence does not account for
deficiencies in concentration); Smith v. Halter, 307 F.3d 377,
380 (6th Cir. 2001) (restricting hypothetical to jobs with-
out quotas, rather than to simple tasks, adequately ad-
dresses impairment in concentration). In fact, the Social
Security Administration itself rejects that position. SSR 85-
15. The Commissioner does not acknowledge these au-
thorities or cite any contrary precedent, nor does he
10 No. 08-1739
explain why the hypothetical failed to include restrictions
on, for example, the ability to understand instructions or
respond to work pressures. See 20 C.F.R. § 404.1545(c). As
a consequence, the vocational expert did not address
these limitations when he suggested vocations such as
punch-board assembler, laundry worker, or sorter. In
light of this clear line of precedent, both the ALJ’s hypo-
thetical and the Commissioner’s subsequent defense of
that hypothetical lack substantial justification. Young,
362 F.3d at 1004-05; Steele, 290 F.3d at 942.
III. CONCLUSION
The denial of fees was thus an abuse of discretion. In her
EAJA petition, Stewart requested $6,914.07 in attorney’s
fees and $350 in costs, and the magistrate judge found
those calculations reasonable. Accordingly, we R EVERSE the
denial of attorney’s fees and R EMAND with instructions to
award the amount requested. We also award appellate
attorney’s fees to Stewart. Stewart’s counsel shall submit a
statement of attorney’s fees incurred on appeal within
fourteen days.
4-2-09